A Record 22.4% Of New-Car Buyers Now Opt For 7-Year Auto Loans To Manage Monthly Payments

Core Insights - Car prices and interest rates remain high, leading buyers to opt for longer loan terms to manage monthly payments [1] - The average amount financed for new vehicles reached an all-time high of $42,388 in Q2 2025, with nearly 20% of buyers agreeing to monthly payments of $1,000 or more [2] Financing Trends - 22.4% of new vehicle shoppers chose an 84-month or longer loan term in Q2 2025, an increase from 20.4% in Q1 2025 and 17.6% a year earlier [1] - The average down payment decreased to $6,433 in Q2 2025, down from $6,579 a year ago [2] Long-Term Loan Considerations - Longer loan terms may lead to higher overall interest costs and increased risk of owing more than the car's worth due to depreciation [3][4] - Buyers are advised to consider total interest costs and potential maintenance expenses associated with longer ownership [4] Alternatives to Long-Term Loans - Options to lower monthly payments without extending loan terms include purchasing lightly used vehicles, increasing down payments, and shopping around for better financing rates [5]